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1984 MAY 30 CC MIN.. WW MINUTES OF THE ADJOURNED REGULAR MEETING OF THE EL SEGUNDO CITY COUNCIL May 30, 1984 I. CALL TO ORDER 1he E1 Segundo City Council convened in an adjourned regular session weanesday, May 30, 1984 at the hour of 6:00 p.m., in the Council Chamber of the El Segundo City Hall. The Clerk reported that an order of Adjournment of Meeting of the City Council had been posted as required by law, and that a Declaration of Posting was in the City Clerk's tile. II. PLEDGE OF ALLEGIANCE was led by Barbara Kirby III. ROLL CALL Present: Councilmembers Jacobson, Schuldt, Siadek, Synadinos, and Mayor Armstrong Absent: Councilmembers None IV. UNFINISHED BUSINESS Mayor Armstrong asked it there was unfinished business. V. SPECIAL ORDER OF BUSINESS A. Consideration of the Capital Improvement Program 1984-89 Mayor Armstrong requested postponement of this item until tomorrow evening, Thursday, play 31, 1984, as he had not had the occasion, or the time, to review the Capital Improvement budyet. WITH CONSENT OF COUNCIL, the Capital Improvement Program 1984 -89 would be held over until May 31, 1984. B. Study of the Operating budget Acting City manager Northcratt proposed a brief outline for consideration summarizing the Operating budget as proposed by the City Manager's Ottice, and the Finance Director. The buoyet as outlined, has a deficit in the combined General Fund of 4i1.2 million. The total reserves are pro3ectea to decline by approximately ,Sb.b million trom $23 million to 416.4 million. This >6.6 million decline includes X3.6 million which is the construction of the Senior Housing Project. The obvious cost we deal with every year is that of personnel, which represents 73% of the General Fund operating budget. And those costs are adjusted annually as a result of negotiations and the movement of the labor market that we compare with. The deficit is reduced considerably by the increased business, and transient occupancy tax that were adjusted last year by the City Council. They did not totally make -up the loss experienced from the big sales tax revenue year of a few years ago. We are looking at a 2.5% operating budget increase over the preceding year when you take into account adjustments that have been approved by the Council as during this fiscal year and through April 30, 1984. The General Fund, which includes General, Parks and Recreation, and Pension Funds, has an increase of 5.6% from the preceding year which is somewhat in line with the cost of living. one point Mr. Northcraft related was on the Gann appropriations limit. The revenues are about $7 million under the limit and the appropriations are estimated to be $3.6 million below our limits. So there appears to be no Gann appropriation limit concerns this year. The deficit is in the neighborhood of $1.2 million. It would be larger except for some rather efficiency efforts and strict budgetary controls that the departments have used. There is also support from the Equipment Replacement Fund and workers' Compensation Insurance Fund of over $400,000 to keep the deticit down. Needed supplemental requests have been deferred, as well as Capital Improvement requests that will be eventually needed. The value of those really needed supplementals that are being recommended to be deferred are in the neighborhood of $4UU,000. Despite the fact that we are recommending $1.5 million expenditures from the Capital Improvement Fund, which will leave less than $20U,000 in that fund. Again this year there is the elimination of any replacement funding or revenue into the Capital Improvement Fund from the general related funds. Taken into account all these factors, Mr. Northcraft stated our true deficit is somewhere in excesss of $2 million. This picture, obviously, does not reflect any impact of the Jarvis IV or our Save 13, the initiative that will be on the California ballot on November 6, 1984. The City Council last year began to implement a recommendation of staff to phase the expansion of revenues over a three year period to account for the long term loss of our sales tax revenue; and also to reduce the impact on local residents and businesses. we began that last year with the increase in the transient occupancy tax and a change of the business registration fee calculation. This plan, if continued, would allow for adjustments, if the sales tax or property tax -2- Council Minutes May 3U, 1984 fi2'3 X �2NO arvis initiative and the impact. Director of Finance Sanchez stated that there are no numbers in terms of the financial impact the initiative would have it it passed, but the implications that are highlighted become somewhat clear in the terms of the ettect it could have. 1. It would place a limitation on the property base taxes. What that means is the term "assessment" would narrowly be defined so that those taxes that are or received through assessments would now be defined as taxes and would be subject to the 2/3 vote. originally, since Prop 13, assessments were not subject to the 2/3 vote, if they were going to be used for specific purposes. 1. Limitations on taxes to pay indebtedness approved by the voters prior to July 1, 1978 would have an impact. More specifically, it would only apply to voter approved indebted- ness for bonded indebtedness only. The connection there is that there have been several cities in L.A. County and others throughout the State of California that have been allowed through the interruption of the courts to apply levy property taxes for the payment of their pension funds. This would clearly eliminate that because the interruption of voter approved indebtedness would only apply to bonded indebtedness and not any indebtedness that is incurred through some contractual obligation, which is the case with our PERS contract. 3. Refund of a three year inflation factor adjustment. All the assessors in the State applied an inflation factor beginning with 1976 -77 when Prop 13 went into effect. What this initiative is proposing is that that inflation tactor of 2% should not have been applied until 1979 -8U, and what they are proposng is that the property taxes that have been levied with that 2% inflation factor built -in, are to be refunded or credited with 13% interest from the date of payment. But the taxes are to be refunded. That in itself is a significant impact. It is almost incredible. 4. Limitation of deficit on full cash value. Under current law the property that has undergone a change in the ownership or new construction, is re- assessed and as of this -3- Council Minutes May 3U, 1984 date the change in ownership or completion of new construction is fair market value. This would require the property that has changed ownership for consideration be re- assessed at its purchase price. Not the fair market value. There could be some impact there on what the re- assessment would have been as opposed to what the purchase price was. That of course is influenced by whatever negotiations are entered into and the purchase. Would also provide that the appraised value of new constructed property may not exceed the direct cost of such new construction. Again, it plays a role in what the assessor determines as the fair market value of that property should be. S. Limitations on new taxes by local governments. The tax would be defined as any levy by the State, local government or agency which does not constitute a fee, assessment or fine. Would provide that any new tax increase levied after August 15, 1983, may be imposed only by a measure approved by at least 2/3 voters. 6. Limitation on new fees and fee increases. It would provide that any new fee or increase in an old fee adopted by local government on or after August 15, 1983 must be approved by 2/3 voters, to the extent that the increase exceeds the consumer price index for the area subject to the fee during the preceding twelve months. In other words, if we wanted to increase a fee we would be limited to the CPI and anything above the CPI would have to be 2/3 vote. 7. Most provisions of the initiative don't go into effect until the date of adoption, November 6, 1984. The sections that apply to fees and taxes are retroactively effective as of August 15, 1983. Acting City Manager Northcraft stated that the information from the League Office is just now beginning to come down to give some date in which to really explore to make that analysis and direct to the Council, some alternatives and how it may impact us. Certainly it's one thing we want to keep in mind, both in negotiations as well as all revenue enhancement options we look at, as well as looking at the ones that have already been enacted that may be impacted. Those three areas we need to be concerned about. Director of Finance Sanchez stated that the initiative redefines taxes, fees and assessments and we need to take a closer look at those definitions to see what's allowed and what is subject to the August 15 date. The first departmental account is the City Council, Account 1100., There are no supplementals recommended. -4- Council Minutes May 30, 1984 X b2`'� Mr. Northcratt stated the City Clerk has one supplemental recommendation; needed but deferred until additional revenues are available. This request talls into that area. It is something that certainly needs to be done, at least an area of work that needs to be done in a city of our size. Mr. Northcratt presented the Finance budget. The needed partitions, remodeling and in -house computer system were addressed. Mr. Northcratt next presented the City Treasurer's area, with one supplemental. The Vehicle Maintenance account was discussed. The next account was the Legal Department. No supplementals. The Professional and Technical account was addressed. The next areaa is Planning and contains Community Block Grant account. Planning is 7A through K and presents two supplementals in addition to the line items. Next account is Personnel and there are no supplementals. Central Processing was then presented with one supplemental. The Community Cable was addressed and has three supplementals. At 7:20 p.m., the Mayor called for a ten minute recess. At 7:33 p.m., the Council reconvened with the following answering roll. Present: Councilmembers Jacobson, Schuldt, Siadek, 5ynadinos, and Mayor Armstrong Absent: Councilmembers None Mr. Northcraft then presented the budget for Community Promotion. Areas of interest discussed were Student Government Day, Christmas Decorations, July 4th, Sister City. In addition, employee awards were addressed along with volunteer recognition. The next division is the Non - Departmental account, which basically handles operational items, that are not attributable to any particular department. There is only one desperately needed supplemental. Method new photocopier purchase was discussed. The need is recognized and it will be handled as soon as possible. -5- Council Minutes May 30, 1984 �( 62?7 The next account is the Police account. There is quite a volume of information, it is a very large departmental account. There are 7 supplementals. Most of them are fairly nominal and recommended with the exception of the 7th one. It is recommended that be deterred. The Police Department in particular aid a very good Sob of really restricting their requests to those they feel are really needed for their operation. MOTION WAS MADE BY COUNCILMAN SIADEK, SECONDED BY COUNCILMAN SCHULDT, to appropriate �69U for 4 steno chairs to be used in the Police Records department. Following dicussion, the MOTION PASSED by the following vote: Ayes: Councilmen Siadek, Schuldt and Mayor Armstrong Noes: Councilmembers Jacobson and Synadinos The next division is building and Safety, account 3300. There is one suplemental in the building and Safety Department. The consultants, Hamilton & Associates, study on Plan Check is currently underway. Mr. Northcratt stated that an information report or data will be available at the June 5 meeting from the consultants. Statt will then have an oppotunity to develop an implementation plan and will be recommending implementation procedures as appropriate, as a result of the study. Next is the Public works section. The first sheets, the first two pages, 19A & 13 are really a summary of the overall Public works Department; 7 divisions. Supplemental request #1, Ulrich Plan Vertical Files, were discussed. MOTION WAS MADE; BY COUNCILWOMAN SYNADINOS, SECONDED BY COUNCILMAN SIADEK that this request be funded and not deferred, regarding the Ulrich Plan Vertical Files. MOTION PASSED by the following vote: Ayes: Councilmembers Siadek, Schuldt, Synadinos and Mayor Armstrong Noes: Councilman Jacobson Mr. Northcratt presented the next section, Street Maintenance, with three supplementals. Traffic Safety is next and is account number 425U, two supplementals. cm Council Minutes May 3U, 1984 X 6��g Mr. Glickman was questioned on the use of goats and burros. Mr. Glickman stated the reasoning for this consideration. Mr. Glickman stated that the only cost, to us, would be transportation of securing the animal. Sanitation was the next division to be looked at. Mr. Northcraft presented Equipment Maintenance, which is the garage function, as the next category. Apparently the garage used restraint about everything they needed when we built the City yard and there is no supplemental requests this year. The last division in the Public Works Department is the water Division, which is an enterprise fund and is not part of the general fund. It is broken into two budget categories; Water Administration and Operation and Maintenance. 31A represents water Administration. No supplementals in 31A. 32A is Water Operation and Maintenance. MOTION by Councilwoman Synadinos, SECONDED by Mayor Armstrong that the meeting be adjourned. VI. ADJOURNMENT No further business appearing to come before the Council at this session, the Mayor declared the meeting adjourned until May 31, 1984 at 6:UU p.m., the hour of adjournment being 9:30 p.m. t Respectfully submitted, Valerie A. t- urrowes, City Clerk APPROVED: Charles K. Armstron ayor 1 -7- Council Minutes May 30, 1984